decades, and in fact, we can see its beginnings with increased office automation, the spread of word processors, and the adoption of integrated workstations. The human-free factory is also in sight. With increasing automation and robotization, it is not only blue-collar jobs that will be eliminated. The change is more profound. We are witnessing the sharpened decline of the factory as the primary function and chief labor-absorber in industry. Research and development (R&D), marketing, finance, corporate strategy, legal affairs—functions that previously were to a certain extent ancillary to production—are assuming the center of the stage. Now manufacturing itself becomes ancillary and often even a candidate for contracting out.

This does not mean, however, that manufacturing technologies are becoming secondary in importance. The contrary is true, and here, too, history offers a parallel. Today’s situation presents an analogy with the position of agriculture after the industrial revolution. All through the history of industrial society, agriculture improved its output and productivity enormously, although it no longer dominated the economy and was not the main source of jobs as it once had been. Industry will repeat this pattern, as the transition to a postindustrial, service-oriented society is completed.

The present era of change is being brought about by a whole cluster of technologies, some of which have an exceptional capacity for horizontal diffusion in all sectors of the economy and society and an equally exceptional capacity for cross-fertilization. Key technologies in this category include the microelectronics-information technologies complex, the biotechnologies, and the new materials science.

This process of technological change spurs structural changes in the economy and society. Mature sectors (such as machine tools and textiles) can be rejuvenated by grafting new technologies onto their processes and products. When this rejuvenation occurs in industrialized countries, these traditional sectors take the lead in international competition. Italy is a case in point, since Italian prosperity is in no small measure due to the restored competitiveness of such sectors. These sectors demonstrate a highly flexible approach to production, making possible less standardized products specifically designed to satisfy the tastes and needs of customers. They also demonstrate considerable creativity through attention to design factors and closer links to the market and its fluctuations, attentiveness to moods and fashions with highly imaginative marketing, and a capacity to absorb new technology and indeed to interact with it to generate improvements and adaptations.

The fact that in Italy these sectors tend to consist of dynamic, small- to medium-size firms organized in industrial districts is extremely important. Such districts operate as coalitions of competitors, interdependent yet united by a common goal. This pattern encourages the diffusion of technology through all firms in the district. This is in marked contrast to experience elsewhere when competing firms tend to keep technological advances closely

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